Which other players will benefit the most from the Kroger / Albertsons Merger?
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mjhale
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Re: Which other players will benefit the most from the Kroger / Albertsons Merger?
I'm wondering what Kroger plans to do with Harris Teeter in the DC area. If Kroger were to keep Harris Teeter over Safeway and lower pricing plus up their prepared foods game I think they would give Ahold a good run against Giant-MD. In my opinion Harris Teeter has well stocked, consistent stores but they are just too expensive. The other question is who would get the divested stores in the DC area and what would that new entity bring to the table. I think the new entrant could be anything from someone like Publix wanting into the market to Aldi and/or Lidl expanding more to ethnic stores wanting to pick up new or more modern locations or someone we aren't even thinking of now.
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buckguy
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Re: Which other players will benefit the most from the Kroger / Albertsons Merger?
The beneficiaries of the merger will be strong regional operations. They dominate customer satisfaction surveys and usually do better volumes and or generate greater profit margins than national or semi-national chains. This has been the case for a long time. Regionals faltered when they expanded too quickly or entered unrelated businesses. The successful regionals generally have expanded slowly and organically.
Kroger will get an alsoran operation in New England where they will face Ahold and some strong regional operators. Acme is in a similar position and the Baltimore/DC Safeways would need to improve their perimeter and get more competitive pricing if any of them fell under Kroger. Kroger never has been strong in any major perimeter area. They might improve the pricing position if they get those stores but that would not be enough.
Fragmentation will continue regardless. It’s been evident in some places more than others, over varying lengths of time. Fragmentation helped the legacy chains in LA strike in 2004, in the sense that people often could shop elsewhere undermining the strikers impact. DC is another area with fragmentation and there have been new entrants like the Streets chain with small scale neighborhood markets. There are places like Atlanta, where there is less fragmentation and it’s curious that Walmart, Costco, Whole Foods, TJs etc. haven’t achieved greater penetration.
Kroger will get an alsoran operation in New England where they will face Ahold and some strong regional operators. Acme is in a similar position and the Baltimore/DC Safeways would need to improve their perimeter and get more competitive pricing if any of them fell under Kroger. Kroger never has been strong in any major perimeter area. They might improve the pricing position if they get those stores but that would not be enough.
Fragmentation will continue regardless. It’s been evident in some places more than others, over varying lengths of time. Fragmentation helped the legacy chains in LA strike in 2004, in the sense that people often could shop elsewhere undermining the strikers impact. DC is another area with fragmentation and there have been new entrants like the Streets chain with small scale neighborhood markets. There are places like Atlanta, where there is less fragmentation and it’s curious that Walmart, Costco, Whole Foods, TJs etc. haven’t achieved greater penetration.